Atlanta Federal Reserve President Raphael Bostic's commentary this week suggested that the era of higher-for-longer interest rates will continue. Bostic noted that progress on taming inflation continues to be "slow," signaling that a Federal Reserve rate cut is unlikely in the near term.

Yahoo Finance's Jared Blikre breaks down the details, dissecting the implications of Bostic's statements and their impact on rate-cut outlooks.

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This post was written by Angel Smith

Video Transcript

At fed President Rafael Bostick noting that progress on inflation is still slow even if it has resumed falling.

Now, Goldman Sachs economist also weighing in on race, Jared licky has the details on that.

Jared.

That's right.

Rafael Bostic is the latest of a plethora of FED speakers this week to come out saying that the fed may have to keep rates higher for longer.

That doesn't sound like anything new, but there are some new details here because the FED is in danger of being on the wrong side of inflation.

Once again, with everybody remembers the transitory episode from a few years ago as far as interest rates.

Bostic is suggesting the Federal Reserve may need to delay cutting rates, potentially keeping the current rate which is five and a quarter to 5.5% longer than expected because the US has not passed that critical point, which inflation we can say is in the rear view mirror.

And yesterday, it was only yesterday that we got the composite PM is those are purchasing purchasing manager manager index surveys.

Those came out at the highest level since April of 2022.

That's important for a number of reasons.

This is a small report that doesn't usually move the market, but it suggests according to S and P, what's what's interesting and this is a quote from S AND P. What's is that the main inflationary impetus is now coming from manufacturing rather than services?

So getting back to Bosch, another thing that he said was interest that I thought was interesting was the FED is going to conduct a new framework review of its inflation target in 2025.

That's next year.

Currently, that target is 2%.

But the FED has been making the case very slowly that maybe just maybe that needs to rise.